In the context of mutual funds, refers to a mutual fund or unit trust whose management decides on the best way to use the assets without restriction to a specific type of security. Bloomberg Financial Dictionary
In the context of trusts, refers to a personal trust in which a trustee has the power of decision as to how much income or principal each beneficiary receives. Bloomberg Financial Dictionary
* * *
* * *
discretionary trust UK US noun [C] LAW
► a legal arrangement in which the person or organization that manages money has the right to decide how to invest it and use the income from the investments: »
A discretionary trust was set up for children whose parents were unable to pay school fees.
► a legal arrangement in which you give a person or organization the right to manage your money after you die and decide how and when to make payments to the people you have chosen to receive the money: »
You can set up a discretionary trust to pass your home on to your children.
Financial and business terms. 2012.